Samsung is spinning off its OLED business, to protect the lucrative division and shield it from the general decline of the display market. The move is a part of wider restructuring efforts taking place inside the company.
According to a report from the Korea Times, Samsung Display is splitting itself into more businesses going forward. This is due to Samsung’s LED display business suffering heavily thanks to the flood of Chinese products on the market. A Samsung executive explained:
Samsung Display separated the company's OLED business division and more of Samsung Display's workforce joined the OLED business unit. The latest decision was part of the ongoing Samsung Group-initiated efforts to restructure unprofitable businesses. Now, Samsung is initiating an exit strategy for LCDs, which are no longer promising and have become unprofitable.
The LCD manufacturing division might be sold off to Chinese companies, though there’s a chance that a different part of Samsung will acquire it to continue pushing LCD TVs.
Meanwhile the OLED business, of which Samsung itself is a huge customer, was reported to have recently won a huge deal with Apple, to supply the iPhone-maker with around 100 million display panels in 2017. The deal is worth $2.6 billion, with Samsung and Apple having signed a three-year commitment. The move is expected to be crucial to Apple’s future iPhones, which are expected to feature OLED displays and a full redesign.
Analysts believe that the OLED market has a bright future ahead of it, while LCDs will continue to decline. According to a report from Nomura Securities, OLED displays will account for a third of all smartphone panels by 2018. That’s a big jump up from today, when OLED panels are common but not ubiquitous.
Samsung and LG have been investing heavily in OLED manufacturing, with both companies betting on huge demand from Apple and other big name gadget companies.
Update: Samsung has reached out to us disputing the account from the Korea Times report. According to the company's spokesperson, Samsung isn't planning on spinning off the OLED division. The full statement follows:
The Korea Times’ article about ‘Samsung spins off OLED business’ is incorrect. Samsung Display has never spun off OLED business and will try its best to develop and produce LCD and OLED products to enrich human-beings (sic) environment and improves the well-being of society, as one of the world-leading display companies.
Source: Korea Times